McDonald's Financial Statements Contain the Following Selected Data (In Millions)

question 95

Essay

McDonald's financial statements contain the following selected data (in millions).


Instructions
(a) Compute the following values and provide a brief interpretation of each.
(1) Working capital. (3) Debt to assets ratio.
(2) Current ratio. (4) Times interest earned.
(b) The notes to McDonald's financial statements show that subsequent to this year the company will have future minimum lease payments under operating leases of $10,513.8 million. If these assets had been purchased with debt, assets and liabilities would rise by approximately $9,400 million. Recompute the debt to assets ratio after adjusting for this. Discuss your result.

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Definitions:

Deposit

A sum of money placed in an account or given as security for the fulfillment of a contractual obligation.

Exculpatory Clauses

Provisions in a contract that release one party from liability for harm caused, typically found in waiver and release agreements.

Courts

Judicial institutions that are authorized to hear and rule on legal disputes.

Exemption

A provision that releases a party from a legal duty, liability, or obligation in specific circumstances.